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CARBO Ceramics Inc. Message Board

  • shuki_sasson shuki_sasson Aug 13, 2011 7:11 PM Flag

    CRR main problem.

    The only problem with CRR is their current limited production capacity. However in 18 month they will increase their production capacity by 50%.
    I anticipate their earning to grow in 30% annually for the next ten years.
    Since fracking will be a big in the US for the next decade I see this business as one that I will be happy to buy and hold and enjoy for a long long time.
    Now seems like an excellent opportunity, I don't see a good reason for the sell off besides the fact that the whole OIL sector went down.
    I don't think that the drilling in the various shales is going to be stopped...
    It is a strong buy.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • CRR is a B2B company that makes a product that is a commodity. Right now they are on the S-Curve growth phase where demand outstrips supply. Competition has not moved in yet. However, it is a matter of time before they do... then there is price and margin erosion. Stock gets killed.

      This kind of thing happens all the time. It happened with DRAM, fiberoptics cable, optical lasers, drilling lubricants, etc. Got to realize this stock is momentum trade and not an investement (most are not!).

      • 2 Replies to ajitmd2000
      • With all due respect, you are absolutley wrong. CRR is the bluest of blue chip stocks - a large share of its market, lots of cash, an ongoing comittment to developing new markets out of cash flow and most of all an 11 to 1 ratio of Retained Earnings to Paid in Capital. In other words, every dollar invested has produced $11 of earnings, after tax and dividend payouts, and that was in a so so market for their products.

        How can you even think this is a momentum stock in face of all these facts? But everyone is entitled to their belief so I'll just keep buying and you can keep carping. As Michael Jordan said "he who hesitates, loses a bundle"

      • Ajitm, where do you think this competition is going to come from? China, Europe. Each well uses millions of pounds, the shear bulk volume makes is cost prohibtive to ship from overseas. Domestically, I have heard the CEO discuss how hard it is to get permits approved and in addition this is not the easiest thing in the world to make. So this is not something a company just says one day we will get into this. It will take a long time, money and research for them to get up to speed to be able to take market share from CRR. Until that time, we will sit back and ride the CRR train. A bigger worry would be being bought out and ending the ride up.

    • Price/ Sales over 1 scares me
      its over 5!

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